Chapter Five

Marketing
Concepts
 What is marketing?
Old sense of making a sale - 'selling'
New sense- meeting customers’ needs
and wants profitably.
 Goal of marketing:
To attract new customers by promising
superior value.
To keep current customers by
delivering satisfaction.
 Cont’d…
• Marketing is about making money
from satisfied customers.
 Marketing deals with customers.
 Marketing the art of choosing
target markets delivering superior
customer value.
 Selling & Marketing

Selling is an action which

converts the product in to cash.
Marketing is the process of
matching and satisfying the
 Definitions Of Marketing

Simplest definition - managing

profitable customer relationships.
It is the process by which companies
create value for customers and build
strong customer relationships in order
to capture value from customers in
return.
 Cont’d…

CIM - “Marketing is the management

process for identifying, anticipating &
satisfying customer requirements
profitably.”
 Putting the right product in the right
place at the right price, at the right time.
 It is a process of transacting goods and
services from the producer to consumers.
 Core Concepts of Marketing
A. Needs, Wants & Demand
 Needs: is a state of felt deprivation. Basic human
requirements.
Wants: are desires for specific satisfiers of needs.
•Shaped by culture & individual personality.
•E.g. A person needs food but wants spaghetti.
 Demands: are wants for specific products that are backed
by ability & willingness to buy them.
 B.Value
A set of benefits promised to consumers to satisfy their
needs.
C. Exchange - is the act of obtaining a desired object from
someone by offering something in return.
D. Marketing offer-Combinations of products offered to a market.
Marketing myopia - the mistake of paying more attention to
the specific products they offer than to the benefits and
experiences produced by these products.
 E. Utility
• is the satisfaction of customers that are getting from
using the product.
1. Form Utility: changing the format of the input into new output.
2. Time Utility: making the product available at the required time.
3. Place utility: exists when a product is readily accessible to
potential customers.
4. Possession utility: created when a customer buys the product-
that is, ownership is transferred to the buyer.
5. Information Utility: it is created by informing prospective
buyers that a product exists.
 Marketing Philosophies
1. Production Concept: it holds that consumers will
favor products that are available and highly
affordable (low in price).
2. Product Concept: it holds that consumers will favor
products that offer the most quality, performance and
innovative features.
3. Selling Concept: it holds that consumers will not
buy enough of the firm’s products unless it
undertakes a large-scale selling and promotion
 Cont’d…
• 4. Marketing Concept: it holds that achieving organizational goals
depends on knowing the needs and wants of target markets and
delivering the desired satisfactions better that competitors do.
 Love the customers, not the product The customer
is King!
• 5. Societal Marketing Concept: it holds that marketing strategy
should deliver value to customers in a way that maintains or
improves both the consumer’s and the society’s well-being.
 Importance of Marketing

 For producer and businessman - helps to make marketing

related decisions:
 Finding out who are our customers?
 What are their need and want
 What good & service to offer & at what price?

 For consumer helps to make marketing related decision

 where to shop,
 Which salesperson to contact,
 what price to pay,
 what to buy.
 Cont’d….
 For an employee - It offers career opportunities to a large number of
people.
 To the society- It contributes to the economic growth and
development of the society & country.
Marketing:
 Promotes product awareness to the public.
 Builds company reputation.
 Helps boost product sales.
 It contributes greatly to the success of the organization.
 Marketing Mix Elements – 4P’s

• The set of marketing tools that

the firm uses to pursue its
marketing objectives in the target
market.
 Marketing Mix Elements – 4P’s

• Robert Lauterborn.
 Seller - oriented 4P’s Customer-oriented 4C’s

•Product - Customer
Solution
•Price - Customer Cost
•Place - Convenience
 Cont’d…
1)Product: refers to goods/services produced for sale.
2)Price: is the amount of money charged for a product or service.
It is the sum of the values that consumers exchange for the
benefit of using the product/service.
It is the only element in the marketing mix that produces
revenue; all other elements represent costs.
3)Place(distribution): channels of distribution you choose to use,
4)Promotion: It is the communication of the company and its products
to customers.
 What is Marketing Strategy?
• It is a plan of action designed to promote and
sell a product or service.
• It is a method of focusing an organization's on
a course of action which can lead to increased
sales and dominance of a targeted market.
• It combines product development, promotion,
distribution, pricing, relationship management
and other elements.
 Pricing
Strategies
a. Price Skimming: setting higher price initially and lowering when new
competitors enter the market.
b. Penetration Pricing: setting low initial price in order to penetrate the
market quickly and deeply to attract large number of buyers and to have
large market share.
c. Psychological pricing: Setting the price of a product in a way that will
alter its perception by customers. Setting a price in odd numbers (just
under round even numbers).
d. Geographic Pricing: The distance between the seller and the buyer is
considered.
 Cont’d…
E. Competition - Based Pricing – It is setting
price based on the prices that competitors charge
for similar products.
• Setting prices relative to competitors.
F. Time-based pricing - a firm varies its price by
the season, the month, the day, and even the hour.
 Promotion Strategies
• Promotional mix- Advertising, personal selling,
public relations, sales promotion.
• Advertising: It is any paid form of non personal,
one-way, mass communication about good, service,
by identified sponsor.
Print media: newspapers, magazines.
Broadcast media: radio, television.
 Outdoor media: billboards or posters
 2. Personal selling
• Is the two-way flow of communication
between a buyer and seller.
• It involves a personal presentation by a
salesperson for the purpose of making sales
and building relationships with customers.
 3. Public relations
• It is a form of communication that seeks to change
the perceptions of customers, suppliers, employees
and other publics about a company and its products.
• 4. Sales promotion: involves short term incentives

of value such as discounts, free samples, and prizes

to be offered to arouse interest of customers in
buying the good/service.
 Distribution Strategies
• Marketing channels are
individuals/organizations involved in the
process of making the product available for
use to consumers.
• Intermediaries: Wholesalers, retailers,
agents, brokers.
• Direct channels (Zero - Level)
• Indirect channels
 Factors should be considered to select the best channel

A.Company Factors: financial, human and

technological capabilities of a company.
B.Market Characteristics: Geography, market
size.
C.Product Attributes: perishability, and
sophistication of the product
Factors Affecting Marketing

Micro Forces Macro Forces

Employees Physical
Intermediarie  Technological
s  Political and legal
Competitors  Demographic
Customers  Economic
Suppliers Socio-cultural
 Marketing Research
• It is the systematic collection, analysis,
interpretation, and reporting of data relating to
the marketing conditions.
• It is the process of gathering information about
consumers that will improve marketing efforts.
• It involves the identification, collection,
analysis, and dissemination of market
information.
 Cont’d…

• The basic reason for carrying out the

marketing research:
• To find out the change in consumer
behavior due to the change in
marketing mix elements .
 Marketing Research Process
1. Define the problem
2. Develop the research plan
3. Collect the information
4. Analyze the information
5. Present (report) the findings
6. Make the decision
 1. Define the Problem
• The problem must be defined adequately.
• Not define a problem too broadly or too
narrowly.
• A well-defined problem is half-solved
problem.
• Answer to the questions. What is to
researched? (content and the scope),
• Why the research is to be done? (decisions
that are to be made).
 2. Develop the research plan

• Involves gathering the information relevant to

the research objective. It includes:
 Data sources- primary source- first-hand
data. Secondary sources data which is
available in the books, journals, reports.
 Research approaches:
o Observational research: observing the happenings in the market.
o Ethnographic research: the researcher studies an individual in the
real-life situation. Purpose - to know the way people live (their
lifestyle).
o Focus group research: six to ten people gather and discuss the
common topic.
o Survey research: conducted to know about the customer’s product
preferences and satisfaction level through questionnaire and interview.
o Experimental research: done to find out the cause and effect
 Sampling plan:
 Sampling unit: whom shall we
survey?
• Sample size: how many units in the
population shall be surveyed?
• Sampling procedure: how the
respondents shall be chosen?
 Contact
methods:
 The researcher has choose the medium through
which the respondents can be contacted. Mediums-
emails, telephone, in person.
3. Collect the information: the researcher has to
adopt the methods to collect the information.
4. Analyze the information: the researchers apply
several statistical techniques to perform the analysis.
 Cont’d….
5. Present (report) the findings: finally, all the findings and the
research are report the top management: managing director, CEO, or
board of directors to make the marketing decisions.
6. Make the decision:

• Design the marketing strategies accordingly.

 Marketing Intelligence
• It is everyday information about dev’ts in the
marketing env’t that helps managers prepare
and adjust marketing plans.
publicly available information about
competitors and trends in the
marketing environment.
 Marketing managers often carry on marketing
intelligence by:

 Reading books, newspapers, and trade

publications;
 Talking to customers, suppliers, distributors
and other outsiders; and
 Talking with other managers and personnel
within the company.
 Competitive Analysis
• It refers to:
Determining the strengths and weaknesses of
competitors.
Designing ways to take opportunities or tackle
threats posed by competitors.
• It is the process identifying competitors and
evaluating their strategies.
• Goal: is to identify and expand competitive
advantage.
 Answer questions
• Who are your competitors?
• What products or services do they sell?
• What are their past and current strategies?
• What type of media are used to market their products or
services?
• What are each competitor's strengths and weaknesses?
• What potential threats do your competitors pose?
• What potential opportunities do they make available for
you?
 Steps of Competitive Analysis
1. Identify competitors: know who are your competitors.
Determine both local and international competitors.
2. Gather information about competitors:
 What market segments your competitors serve?
 What benefits your competitors offer?
 Why customers buy from them?
 Their products or services, pricing, and promotion
strategies.
 3. Analysing the Competition
How are you going to compete with that
company?
Is there a particular segment of the market that
your competitor has ignored?
Is there a service that customers or clients
want that your competitors do not supply?
 4. Develop a pricing
• Develop a pricing model that represents
what you are offering the market and the
value you bring to your target buyers.
• To make your competitive analysis
effective, transfer the weaknesses of your
competitors into potential strengths for
your business.
 International Marketing
• It is carrying out marketing outside the
national boundaries.
• It is the process of marketing a product or
service in multiple countries.
• Marketing activities are undertaken in several
countries.
THE END